Alcoholic Beverages Lawhttps://www.alcoholicbeverageslawblog.com
Insight and Information for the Wine, Beer and Distilled Spirits IndustryFri, 06 Oct 2017 22:11:41 +0000en-UShourly1https://wordpress.org/?v=4.7.7Subscribe with My Yahoo!Subscribe with NewsGatorSubscribe with My AOLSubscribe with BloglinesSubscribe with NetvibesSubscribe with GoogleSubscribe with PageflakesSubscribe with PlusmoSubscribe with The Free DictionarySubscribe with Bitty BrowserSubscribe with Live.comSubscribe with Excite MIXSubscribe with WebwagSubscribe with Podcast ReadySubscribe with WikioSubscribe with Daily RotationNinth Circuit Rejects Retail Digital Network’s Challenge to the Constitutionality of California Tied House Lawhttp://feeds.lexblog.com/~r/AlcoholicBeveragesLawBlog/~3/zXNWQdruFN4/
https://www.alcoholicbeverageslawblog.com/2017/08/articles/legislation/ninth-circuit-rejects-retail-digital-networks-challenge-constitutionality-california-tied-house-law/#respondWed, 23 Aug 2017 18:23:36 +0000http://www.alcoholicbeverageslawblog.com/?p=870This post was co-authored by Stoel Rives summer associate Chad Punch. Earlier this summer, the Ninth Circuit Court of Appeals revisited an issue that it had examined thirty years prior: whether a California Prohibition-era tied house law is unconstitutional under the First Amendment because it impermissibly restricts commercial speech. Specifically, in Retail Digital Network, LLC v. … Continue Reading

Earlier this summer, the Ninth Circuit Court of Appeals revisited an issue that it had examined thirty years prior: whether a California Prohibition-era tied house law is unconstitutional under the First Amendment because it impermissibly restricts commercial speech. Specifically, in Retail Digital Network, LLC v. Prieto (No. 13-56069), the plaintiff, Retail Digital Network, LLC (“RDN”) sued Ramona Prieto (“Prieto”) in her official capacity as Acting Director of the California Department of Alcoholic Beverage Control (“CABC”) seeking a declaration that California Business and Professions Code § 25503(f)–(h), which prohibits alcohol manufacturers and wholesalers from providing anything of value to retailers in exchange for advertising their alcohol products, violates the First Amendment of the Constitution. Hearkening back to its earlier decision in Actmedia, Inc. v. Stroh (830 F.2d 957 (9th Cir. 1986)), the court here ultimately disagreed with RDN’s arguments and left California’s longstanding tied house laws intact.

Decades prior, in Actmedia, the Ninth Circuit rejected a similar First Amendment challenge to the same California and Professions Code provision. Actmedia was engaged as an advertising middle-man. It leased advertising space on supermarket shopping carts, and placed other companies’ advertisements on those carts, including ads from alcohol manufacturer Adolph Coors Company (“Coors”). The CABC learned of the ads and determined that Coors had violated Section 25503(h) and threatened to revoke Coors’ California beer and wine licenses. Coors had its advertising removed from shopping carts and terminated its contract with Actmedia. Similar to RDN, Actmedia sought a declaration from the CABC that Coors’ conduct did not violate Section 25503(h), and even if it did, the law impermissibly restricted commercial speech under the First Amendment.

In Actmedia, the court applied the four-part “intermediate scrutiny” test first developed by the Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York (447 U.S. 557 (1980)) to determine and assess restrictions on commercial speech. Under the Central Hudson framework, (1) the speech must concern lawful activity and not be misleading; (2) the asserted governmental interest must be substantial; (3) the government’s regulation must directly advance the governmental interests asserted, and; (4) there must be a reasonable fit between the legislature’s ends and the means chosen to accomplish those ends. There, Actmedia’s contentions were rejected by the court. The Ninth Circuit ruled that Section 25503(h) passed constitutional muster under the four Central Hudson factors.

Fast-forward thirty years, and the Ninth Circuit was presented with a similar set of facts. RDN was in the business of installing large electronic advertising displays in alcohol retail stores throughout Southern California. The company sold advertising slots to various alcohol manufacturers and would then share a portion of the profit from those sales with the retail stores. RDN agreed to run advertisements for two large alcohol manufacturers, however, both companies, as well as several other multinational alcohol manufacturers, ultimately shied away from this type of advertising fearing that it could lead the CABC to take enforcement action like it had against Coors.

Due to the loss of advertising contracts with alcohol manufacturers, RDN brought an action against Prieto claiming that California’s tied house restrictions are unconstitutional and that Actmedia was no longer good law because the Supreme Court’s 2011 decision in Sorrell v. IMS Health Inc. (564 U.S. 552 (2011)) fundamentally altered Central Hudson’s four-part test. RDN argued that the decision in Sorrell resulted in heightened judicial scrutiny for content-based commercial speech restrictions. The court rejected RDN’s argument and held instead that Sorrell did not modify the Central Hudson test, nor did it heighten judicial scrutiny. The Central Hudson analysis continues to apply almost exactly as it did in Actmedia.

Applying the factors one by one, the court found that the advertisements displayed by RDN concerned lawful activity and were not misleading, satisfying the first factor. The court also found that the CABC’s interest in regulating the tiers of the alcoholic beverage industry in California was substantial, satisfying the second factor.

The Ninth Circuit focused its attention on the third and fourth factors of the Central Hudson test. Previously, in Actmedia, the court found that Section 25503(h) directly and materially advanced California’s interest in promoting temperance. The court did not come to the same conclusion in Retail Digital Media. The court held that Section 25503(h) only indirectly advances California’s interest in promoting temperance since Section 25503(h) only applies to advertising in retail establishments, which is, as the court noted, “a small portion of the alcohol advertising viable to consumers.” Nonetheless, the court found that the third factor of Central Hudson was established because Section 25503(h) directly and materially advances California’s interest in maintaining a triple-tiered market system.

The fourth and final factor was also met. The court explained that Section 25503(h) is “‘as narrowly drawn as possible to effectuate’ California’s purpose of preventing the illegal payoffs that would undermine its three-tiered alcohol distribution system.”

The en banc Ninth Circuit decision in Retail Digital Media sets an important precedent in the defense of state tied house laws. We will keep our readers updated on any further appeals to the Ninth Circuit’s decision.

]]>https://www.alcoholicbeverageslawblog.com/2017/08/articles/legislation/ninth-circuit-rejects-retail-digital-networks-challenge-constitutionality-california-tied-house-law/feed/0https://www.alcoholicbeverageslawblog.com/2017/08/articles/legislation/ninth-circuit-rejects-retail-digital-networks-challenge-constitutionality-california-tied-house-law/2017 Changes to Washington Liquor Laws Affecting Producers and Distributorshttp://feeds.lexblog.com/~r/AlcoholicBeveragesLawBlog/~3/_uZktFvKzTA/
https://www.alcoholicbeverageslawblog.com/2017/08/articles/alcohol-and-liquor/2017-changes-washington-liquor-laws-affecting-producers-distributors/#respondThu, 03 Aug 2017 23:31:22 +0000http://www.alcoholicbeverageslawblog.com/?p=864This post was guest authored by Stoel Rives summer associate Alex Pearson. With the Washington State Legislature’s third special session at a close, now is a good time for alcoholic beverage producers and distributors to take a moment to look at five bills that passed the Legislature and were signed into law by Governor Inslee this … Continue Reading

With the Washington State Legislature’s third special session at a close, now is a good time for alcoholic beverage producers and distributors to take a moment to look at five bills that passed the Legislature and were signed into law by Governor Inslee this past session. All are effective as of July 23, 2017, and create new opportunities for producers and distributors. What follows is a summary of the more notable additions and modifications made by these new laws. Please note that these laws affect a variety of licensees, so we encourage all producers and distributors to evaluate these changes with their attorney.

Legal Definition of Mead

One of the world’s oldest alcoholic beverages—mead—finally has a legal definition in Washington. S.H.B. 1176 amends RCW 66.24.215 and RCW 66.28.360 to define mead as a wine or malt beverage sold as “mead” and which is fermented primarily from honey, but may contain other agricultural products such as fruit, hops, or spices. Those licensed to sell beer or cider in growlers will also be allowed to similarly sell mead to customers, so long as the mead sold has an alcohol content equal to or less than 14 percent alcohol by volume. Additionally, starting January 1, 2018, mead will be exempt from the assessment on wine production that funds the Washington Wine Commission.

Increase in Satellite Winery Tasting Rooms

S.H.B. 1038 amends RCW 66.24.170 to promote small wineries by increasing the total number of satellite tasting rooms domestic wineries may have—up from two to four. The existing requirements and privileges of these satellite tasting rooms are unchanged. Satellite tasting rooms may be located separately from production or manufacturing sites and may serve wine samples and sell the producer’s wine at retail or for off-site consumption in kegs or growlers. They may not serve as distribution sites and all those selling or serving wine must have the proper server permit. Note that these separate tasting rooms must be approved and licensed by the Washington State Liquor and Cannabis Board and if multiple wineries operate a single location they can be held jointly liable for certain violations, under certain circumstances.

Spirits and Wine Sales to Employees

S.S.B. 5537, which adds a new section to RCW 66.28, allows licensed spirits and wine distributors to sell spirits or wine that cannot reasonably be sold in the normal course of business directly to full-time employees, subject to some restrictions. For licensed spirits distributors, these sales are still subject to the license issuance fee established under RCW 66.24.630(4) and the taxes imposed on retail sales by RCW 82.08.150. Similarly, for licensed wine distributors, these sales are subject to all of the same taxes applicable to a normal retail sale.

Both licensed spirits and wine distributors may make these sales so long as the:

Products cannot be sold at retail, for example, because of damage to labels;

Products are not sold at less than the cost of acquisition;

Full-time employee has been employed for at least 90 days and is at least 21 years old; and

Employee only uses the products for personal use and does not resell them.

Distillery Samples

S.S.B. 5589 amends RCW 66.24.140 to loosen some of the restrictions surrounding the samples distillers may sell or sever free of charge to customers. Under current law, distilleries may serve samples of their own spirits on the distillery premises, all severs must be properly permitted, and there is a maximum amount of two ounces per person, per day that may be sampled. These aspects of the law remain unchanged.

However, previously, distilleries could only sell or serve individual samples containing not more than one-half ounce of spirits, which could only be mixed with nonalcoholic mixers, water, and/or ice. Under the new law, distilleries may now provide these samples mixed with alcoholic mixers, so long as the alcoholic mixers are produced by the distiller. Further, the sale of mixed samples is no longer subject to the one-half ounce limit per sample, though the maximum amount of alcohol that may be sampled remains two ounces per person, per day.

Spirits Warehouses

E.S.B. 5834 amends RCW 66.24.640 and adds a new section to RCW 66.24 to create a license allowing for maintaining warehouses to store spirits off the premises of a distillery, subject to some limitations. The new license is issued by the Washington State Liquor and Cannabis Board (Board) and allows for the storage and handling of bonded bulk spirits and, as allowed by the Board’s rules and federal law, bottled spirits in these warehouses. The fee for the license is set at $100 per year.

The law establishes numerous requirements for the license application and the operation of these warehouses. For instance, applicants must designate and physically separate portions of the warehouse for either bonded or nonbonded spirits. The warehouse proprietor must also maintain a tracking plan to ensure compliance with all applicable bonding and tax obligations. Further, the law establishes limitations on permissible licensees, the circumstances for removal of spirits from the warehouses, the permitted handling of bottled spirits removed from the warehouses, and monthly reporting requirements for warehouse operators. Notably, the law also creates the opportunity for multiple distilleries to jointly operate a warehouse, for contracting out the ownership and operation of the warehouse, and for the storage of out-of-state spirits, under some circumstances.

Those interested in applying for a license should take note that the law also requires the Board to adopt additional rules regarding qualification, maintenance, zoning, physical separation, and security of the warehouses and authorizes the establishment of a permit allowing for unlimited transfers of spirits to and from the warehouses.

]]>https://www.alcoholicbeverageslawblog.com/2017/08/articles/alcohol-and-liquor/2017-changes-washington-liquor-laws-affecting-producers-distributors/feed/0https://www.alcoholicbeverageslawblog.com/2017/08/articles/alcohol-and-liquor/2017-changes-washington-liquor-laws-affecting-producers-distributors/2017 Changes to Oregon Liquor Lawshttp://feeds.lexblog.com/~r/AlcoholicBeveragesLawBlog/~3/dbPxcz4JFJA/
https://www.alcoholicbeverageslawblog.com/2017/07/articles/alcohol-and-liquor/2017-changes-oregon-liquor-laws/#respondThu, 20 Jul 2017 22:20:36 +0000http://www.alcoholicbeverageslawblog.com/?p=856This post was guest authored by Stoel Rives summer associate Antonija Krizanac. Since the 2017 Oregon Legislative Session convened on February 1, 2017, the Legislature has introduced a variety of bills that impact the Oregon alcohol and beverage industry. Out of the countless proposed bills, five have already been signed by the Governor and will go … Continue Reading

Since the 2017 Oregon Legislative Session convened on February 1, 2017, the Legislature has introduced a variety of bills that impact the Oregon alcohol and beverage industry. Out of the countless proposed bills, five have already been signed by the Governor and will go into effect this year or early 2018 and may impact your business. Following is a summary of those bills.

The bill modifies the definition of cider in order to increase the allowable alcohol by volume limit from 7% to 8.5%. By raising the limit, Oregon cider producers will be able to match the federal designation and will only have to make one set of calculations when completing tax filings for both federal and Oregon taxes.

Currently, the OLCC issues numerous types of licenses based upon the business model of the licensee. One of these, the brewery-public house license, permits the holder to manufacture and sell malt beverages, including the products manufactured by the licensee, as well as sell wine and cider for consumption on or off premises, at the location of manufacture plus one additional location.

House Bill 2160 alters the current law by authorizing brewery-public house licensees to hold and sell their products at two locations in addition to their site of product manufacture.

This measure is modeled on the winery statute, Senate Bill 841 (2013), and it establishes a cider business as a permitted use on land zoned for exclusive farm use or mixed farm and forest use provided that the cider business meets specified criteria related to cider production and source of apples or pears. The measure also allows a cider business to hold agritourism or other commercial events at its location for up to 18 days per calendar year.

On July 23, 2017, numerous Bills will go into effect that will meaningfully impact alcohol and beverage retailers across Washington. Governor Jay Inslee will sign four bills that will create opportunities for alcohol retailers and simplify the licensing process for current and future licensees. Additionally, although not yet passed by the legislature, S.B. 5164 would expand the criteria under RCW 66.24.363 to authorize the issuance of a beer and wine tasting endorsement to small retailers of meat, seafood, poultry, and cheese. The following is a summary of some of the notable changes adopted in these bills. Note that many of the changes affect licenses, so we encourage anyone who sells alcohol in Washington to discuss these changes with their attorney.

Special Permit for Wine Auctions

H.B. 1718 amends RCW 66.20.010 to improve the process for non-profits hoping to hold wine auctions at their charitable events. While the previous process for holding wine auctions proved strenuous for many non-profits, this Bill simplifies the process by creating a special permit specifically for private wine auctions. The special permit allows non-profits to auction wine for off-premises consumption and to provide auction guests with tasting samples of the wine to be auctioned at the event. More than one winery may participate in the auction, but each must be listed on the application for the special permit. A $25.00 fee will be charged for each winery listed on the permit. Non-profit organizations considering holding a private auction should be sure to apply for a permit prior to the event.

S.B. 5665 amends RCW 66.28.270, allowing licensed distributors to pass credit card fees on to purchasers who are licensed to sell beer, wine, and spirits for on-premises consumption. The Bill requires that the decision of the purchaser to use a credit card be voluntary, and mandates that the distributor set credit card fees out as a separate line item on each invoice. Distributors must also use the same method to calculate fees for every customer. A note to distributors: remember that the total of all fees passed on to customers may not exceed the total fees imposed on the distributor by the credit card issuer in that same time period.

Caterer’s Endorsement for Tavern Licensees

Under H.B. 1902, which amends RCW 66.24.330, tavern license holders may now be issued a caterer’s endorsement, allowing the licensee to sell and serve liquor from its liquor stocks at locations other than the licensed premises. Certain restrictions will apply if the event is open to the public.

The caterer’s endorsement allows tavern licensees to:

Store liquor on an unlicensed premises of another party;

Store liquor on a premises operated by the licensee other than the licensed premises; and

Use the endorsement at a domestic winery and store liquor at the winery, subject to certain conditions.

Tavern licensees should be cognizant of who serves liquor at catered events; only employees of the licensee who possess a class 12 alcohol server permit license may serve liquor on behalf of the licensee under the caterer’s endorsement.

In addition to the benefits of the caterer’s endorsement, tavern licensees or their managers may now provide beer or wine to employees without charge in connection with instruction on beer and wine.

Creation of Combination Spirits, Beer, and Wine License

H.B. 1351 adds a new section to RCW 66.24, creating the combination spirits, beer, and wine license (“Combination License”). The Combination License simplifies the licensing process by creating a single license for use by specified beer, wine, and spirits retailers. The Combination License will cost $316.00 per store.

Licensees of a Combination License may:

Sell wine and beer, including strong beer, at retail in bottles, cans, and original containers, not to be consumed on the premises where sold;

Sell spirits in original containers to consumers for consumption off the licensed premises and to permit holders;

Sell spirits in original contains to certain retailers, but such sales cannot exceed 24 liters; and

Export spirits.

H.B. 1351 amends RCW 66.24.360, 66.24.371, 66.24.630, and 66.24.363 by simplifying the application process for many retail license holders. The Combination License can now serve as the exclusive license for retailers who qualify for both a Combination License and for certain retail licenses, including grocery store licenses, beer and/or wine retailer’s licenses, or spirits licenses. Combination License holders will also qualify for certain endorsements available to grocery stores and beer and/or wine specialty shops.

Additionally, further H.B. 1351 streamlines licensing by permitting holders of the beer and/or wine specialty shop license and the spirits retail license to transition to a single Combination License, by approval of the board.

Beer and Wine Tastings at Small Meat, Seafood, Poultry, and Cheese Retailers

Although still not passed by the legislature, S.B. 5164 could bring exciting opportunities to meat, poultry, seafood, and cheese shops. S.B. 5164 would amend RCW 66.24.363, which currently allows grocery stores licensed under RCW 66.24.360 to apply for an endorsement to offer beer and wine tastings. This Bill would authorize the issuance of such an endorsement to grocery store licensees with retail areas of less than ten thousand square feet who derive at least fifty percent of their revenue from the sale of any combination of fresh meat, fresh poultry, seafood, or cheese. These retailers would still be required to meet other criteria for issuance of the beer and wine tasting endorsement, as well as comply with all conditions for conducting beer and wine tastings.

]]>https://www.alcoholicbeverageslawblog.com/2017/07/articles/alcohol-and-liquor/2017-changes-washington-liquor-laws-affecting-retailers/feed/0https://www.alcoholicbeverageslawblog.com/2017/07/articles/alcohol-and-liquor/2017-changes-washington-liquor-laws-affecting-retailers/Proposed Parking Changes Will Increase Portland Hotels’ Flexibility to Utilize Parking Assetshttp://feeds.lexblog.com/~r/AlcoholicBeveragesLawBlog/~3/IGvxZkmfdKo/
https://www.alcoholicbeverageslawblog.com/2017/04/articles/hotels-and-hospitality/proposed-parking-changes-will-increase-portland-hotels-flexibility-utilize-parking-assets/#respondMon, 03 Apr 2017 22:51:57 +0000http://www.alcoholicbeverageslawblog.com/?p=851For years, the City of Portland has had an expansive, complex and restrictive regulatory system for parking in the Central City. However, in an effort to promote better utilization of Central City parking spaces, the City is currently considering substantial simplification of its Central City parking code, which hotels may benefit from. Historically, hotels selling … Continue Reading

]]>For years, the City of Portland has had an expansive, complex and restrictive regulatory system for parking in the Central City. However, in an effort to promote better utilization of Central City parking spaces, the City is currently considering substantial simplification of its Central City parking code, which hotels may benefit from.

Historically, hotels selling onsite parking spaces to non-guests were potentially vulnerable to zoning code enforcement actions prohibiting rental of those spaces to persons not patronizing the hotel. Because a hotel might not be able to prove that the rental of parking spaces to non-guests was a legal, nonconforming use, predating the City’s extensive parking regulation system, a hotel might be ordered to cease renting spaces to downtown drivers without “business” at the hotel site. Things may, however, become easier.

The proposed parking regulation changes are part of the City’s Central City 2035 planning process. The published draft being discussed by the City’s Planning and Sustainability Commission removes Residential/Hotel as a parking type and instead includes Residential/Hotel parking in the Growth Parking designation. Whereas the existing code requires that Residential/Hotel parking be accessory to the residential or hotel use, serving users of the residence or hotel, Growth Parking is proposed to be available for both accessory and commercial parking at all times so a hotel could, for example, rent its parking spaces to people attending an offsite show or employees of a neighboring business and not risk running afoul of the zoning code.

The proposed zoning code changes also standardize parking ratios for hotels throughout the Central City. As proposed, the maximum parking ratio in the City’s North Pearl, North/Northeast, Goose Hollow, Core, Central Eastside and South Waterfront areas of the Central City will be one space per room plus 1/1,000 square feet of meeting/conference room space, as opposed to the current scheme, where the parking ratio varies by neighborhood.

The draft code also expands the class of uses eligible to obtain Preservation Parking to include hotels. Preservation Parking has historically been used to permit development of parking to serve existing older buildings, but hotels are limited in their ability to utilize Preservation Parking under the current Central City code. The proposed changes allow hotels with 0.5 or fewer parking stalls per room to apply for Preservation Parking offsite at half the ratio allowed for new hotels.

Extensive public testimony was received by the City’s Planning and Sustainability Commission following publication of draft zoning code amendments in the summer of 2016. The Commission’s last work session to develop its City Council recommendation is currently scheduled for May 2017, after which a proposed draft reflecting the Commission’s recommendations will be forwarded to the City Council for additional public hearings and consideration. If adopted, the proposed changes will increase hotels’ flexibility in utilizing their parking assets and meeting their parking needs offsite.

]]>https://www.alcoholicbeverageslawblog.com/2017/04/articles/hotels-and-hospitality/proposed-parking-changes-will-increase-portland-hotels-flexibility-utilize-parking-assets/feed/0https://www.alcoholicbeverageslawblog.com/2017/04/articles/hotels-and-hospitality/proposed-parking-changes-will-increase-portland-hotels-flexibility-utilize-parking-assets/2017 Food Service Guidance for Oregon Winerieshttp://feeds.lexblog.com/~r/AlcoholicBeveragesLawBlog/~3/n_AFNjcgm68/
https://www.alcoholicbeverageslawblog.com/2017/04/articles/wine-law/2017-food-service-guidance-oregon-wineries/#respondMon, 03 Apr 2017 22:48:51 +0000http://www.alcoholicbeverageslawblog.com/?p=848The January 2017 “Guidance for Food Service at Wineries on Farmland under Oregon Senate Bill 841” issued by the Oregon Land Conservation and Development Commission and Oregon Liquor Commission with input from the Oregon Winegrowers Association, seeks to help answer questions that have arisen since the 2013 enactment of Senate Bill 841. Prior to enactment of … Continue Reading

]]>The January 2017 “Guidance for Food Service at Wineries on Farmland under Oregon Senate Bill 841” issued by the Oregon Land Conservation and Development Commission and Oregon Liquor Commission with input from the Oregon Winegrowers Association, seeks to help answer questions that have arisen since the 2013 enactment of Senate Bill 841.

Prior to enactment of SB 841, food service at permitted use wineries on farm land was limited to “individually portioned prepackaged foods prepared from an approved source by a commercial processor.” Guidance at 2. Counties may no longer enforce that limited service restaurant restriction on wineries that qualify as permitted uses under current law. Guidance at 3. That said, restaurants are still not allowed.

Oregon’s land use system places a high priority on preservation of farmland for farm use, and state law identifies types of uses permitted outright on land with exclusive farm use zoning and uses that may be conditionally allowed on those lands. (See, for example, ORS 215.283.) SB 841 revised ORS 215.452 to provide production and vineyard size standards for wineries classified as permitted outright. Food service is allowed at these permitted wineries on both exclusive farm use land and mixed farm forest lands subject to statutory limitations.

Given that Oregon Liquor Control Commission Rules may require that food be available as part of the onsite consumption of wine, and the fact that tailored events such as wine-food pairings and winemaker dinners may promote winery success, the enhanced flexibility provided by SB 841 is welcome. Still, as the Guidance makes clear, food service may not become the predominant activity. The Guidance ends with a series of questions that may help a winery operation determine whether proposed food service is authorized at a permitted use winery. Among those questions are:

Whether the food is tailored to the wine offerings and marketed as an accompaniment to the wine or is a stand-alone offering;

Whether the winery consistently provides substantial food service, or instead reserves this service to special occasions; and

Whether the predominant activity in the tasting room is dining as opposed to wine tasting, wine sales and related wine marketing.

At the end of the day, food service may not become the predominant activity at a permitted use winery. Statutory requirements like the provision that the winery’s gross income from all retail sales of non-wine products and services not exceed 25% of the winery’s onsite retail sale of wine, will ensure that this is the case. Wineries that don’t qualify as permitted wineries may still be conditionally allowed, with food service, as a commercial activity in conjunction with farm use.

]]>https://www.alcoholicbeverageslawblog.com/2017/04/articles/wine-law/2017-food-service-guidance-oregon-wineries/feed/0https://www.alcoholicbeverageslawblog.com/2017/04/articles/wine-law/2017-food-service-guidance-oregon-wineries/2017 Changes to Utah Liquor Lawshttp://feeds.lexblog.com/~r/AlcoholicBeveragesLawBlog/~3/wsTNotTKVTE/
https://www.alcoholicbeverageslawblog.com/2017/03/articles/alcohol-and-liquor/2017-changes-utah-liquor-laws/#respondThu, 30 Mar 2017 20:56:54 +0000http://www.alcoholicbeverageslawblog.com/?p=842Significant changes are on the way for Liquor Laws in Utah. H.B. 442 passed the legislature on March 8, 2017 and Governor Herbert signed it into law March 29, 2017. The new law makes numerous changes to how restaurants, dining clubs and off-premise beer retailers will operate. These changes will create opportunities for some, and present … Continue Reading

]]>Significant changes are on the way for Liquor Laws in Utah. H.B. 442 passed the legislature on March 8, 2017 and Governor Herbert signed it into law March 29, 2017. The new law makes numerous changes to how restaurants, dining clubs and off-premise beer retailers will operate. These changes will create opportunities for some, and present significant challenges for others. Following is a summary of some of the more meaningful changes for businesses. Note that the law affects many licensees though, so we encourage anyone who sells alcohol in Utah to discuss the changes with their attorney.

Restaurants and Bars

The law replaces the current Restaurant – Dining Club – Social Club structure with two categories: Restaurants and Bars, making Dining Clubs obsolete. Bars and restaurants will have to start displaying an 8.5 x 11 sign declaring that they are either a bar or a restaurant, and not the other.

On the good news front, restaurants will be able to choose how they want to operate their own bars from the following three options:

Keep the Zion curtain – continue under the current rules that require all pouring and mixing of drinks to occur behind an opaque barrier.

No minor zone – create a 10 foot area around the bar where minors are not allowed.

Barrier – install a barrier that is at least 42” high and 5 feet from the bar where minors are not allowed.

Existing restaurants may tear down their Zion curtains only after changes are approved by the Department of Alcoholic Beverage Control (DABC). According to the DABC, applications to make changes to Zion curtains should be available soon on their website. DABC has guaranteed it will review applications submitted by May 9, 2017 in a timely manner, presumably in time for restaurants to adopt changes come July 1, 2017 when these portions of the law go into effect. Requests made after May 9 will be handled as time permits, and delays should be expected given the increased workload the new law puts on DABC.

The new law also extends hours of service and reduces the wine exception (where it doesn’t count against the 70/30 ratio) from $250 to $175 per bottle and over $30 per glass). Other existing operational rules for restaurants still apply, e.g., patrons still cannot stand or walk with a drink and servers must confirm a patron’s intent-to-dine. Patrons waiting for a table may be served one drink if they intend-to-dine and they are seated.

Dining Clubs

Dining clubs will soon be Dodo birds and DABC announced at the March meeting that it will not issue any more dining club licenses. Those who hold a dining club license have until July 1, 2018 to elect to operate as a bar (fka social clubs) or a restaurant. If a restaurant election is made, then the business must comply with the restaurant operation rules by 2022, although some rules will have to be implemented prior to then. If a bar election is made, the major change will be that minors will no longer be allowed. Note, however, that zoning rules and leases may have constraints regarding operating as a bar. If you have a dining club license, we suggest you start considering the options early.

Convenience & Grocery Stores

If you sell beer for off-premise consumption, then you may display the beer only in 2 locations in a store. The 2 beer displays must not be adjacent to non-alcoholic beverage displays unless a physical divider separates the products or the beer is in a separate cooler with a door. These rules are effective August 1, 2017 for businesses with 2 or more off-premise locations, and May 9, 2017 for retailers with only 1 location.

Businesses that sell beer for off premise consumption will also have to obtain a license from the state beginning July 1, 2018. In addition, management and staff will have to complete training to be provided by the DABC and will be subject to disciplinary actions.

]]>https://www.alcoholicbeverageslawblog.com/2017/03/articles/alcohol-and-liquor/2017-changes-utah-liquor-laws/feed/0https://www.alcoholicbeverageslawblog.com/2017/03/articles/alcohol-and-liquor/2017-changes-utah-liquor-laws/Sonoma County Rejects Wine Industry Request for Voice in Groundwater Regulationshttp://feeds.lexblog.com/~r/AlcoholicBeveragesLawBlog/~3/pwuj_vtL5yY/
https://www.alcoholicbeverageslawblog.com/2016/11/articles/wine-law/california-wine-issues/sonoma-county-rejects-wine-industry-request-voice-groundwater-regulations/#respondWed, 02 Nov 2016 15:33:54 +0000http://www.alcoholicbeverageslawblog.com/?p=833This blog post was co-authored by Stoel Rives attorneys Wes Miliband and Eric Skanchy. Under the Sustainable Groundwater Management Act (“SGMA”), California’s landmark groundwater legislation, local Groundwater Sustainability Agencies (“GSAs”) must be formed to assess conditions in their local water basins and to develop locally-based groundwater sustainability plans (“GSPs”). GSAs, which must be formed by June … Continue Reading

Under the Sustainable Groundwater Management Act (“SGMA”), California’s landmark groundwater legislation, local Groundwater Sustainability Agencies (“GSAs”) must be formed to assess conditions in their local water basins and to develop locally-based groundwater sustainability plans (“GSPs”).

GSAs, which must be formed by June 30, 2017, will have the ability to register and monitor wells and to potentially restrict pumping and prevent drilling of new wells. GSAs will also have the ability to assess new fees and taxes. These local agencies will be in the driver’s seat when it comes to addressing a very complex problem seen in many areas of California: managing groundwater to ensure long-term sustainability of groundwater supplies.

Given the influence these GSAs will have, it is not surprising that various interest groups and stakeholders covet a seat at the table. This was not lost on wine industry representatives in Sonoma County, who petitioned the County to give the industry voting power on the yet-to-be-formed GSAs.

Under the proposal from the Water Agency, cities, water districts, resource conservation districts and the County would appoint members from within their ranks to the GSAs. On its website, the County has provided a list of GSA-eligible entities. Interest groups would be able to offer recommendations to the GSAs but would not have voting power. Three separate regulatory bodies, one each to oversee groundwater in the Santa Rosa Plain, Sonoma Valley and Petaluma Valley, will likely be formed.

County Supervisors expressed concern about not giving interest groups voting power, but ultimately voiced support for the Water Agency’s recommendation to only give voting power to public entities. County officials reasoned that by limiting the seats on the GSAs to only public officials, the GSAs would be directly accountable not only to the residential well owners, but also to the various interest groups from agriculture and beyond.

This latest development signals the complexities experienced by many public and private interests around the State of California as SGMA implementation is now well underway, with many rightfully wanting to ensure their voice is heard.

]]>https://www.alcoholicbeverageslawblog.com/2016/11/articles/wine-law/california-wine-issues/sonoma-county-rejects-wine-industry-request-voice-groundwater-regulations/feed/0https://www.alcoholicbeverageslawblog.com/2016/11/articles/wine-law/california-wine-issues/sonoma-county-rejects-wine-industry-request-voice-groundwater-regulations/California Expands Overtime for Farmworkershttp://feeds.lexblog.com/~r/AlcoholicBeveragesLawBlog/~3/pjOBrdOtVo0/
https://www.alcoholicbeverageslawblog.com/2016/10/articles/wine-law/california-wine-issues/california-expands-overtime-farmworkers/#respondTue, 04 Oct 2016 17:23:23 +0000http://www.alcoholicbeverageslawblog.com/?p=825The following is an adaptation by my colleague Tony DeCristoforo of a post by Bryan Hawkins, Kirk Maag and Adam Belzberg that originally appeared on Stoel Rives World of Employment blog. California Governor Jerry Brown recently signed AB 1066, which will require grape growers and other agricultural employers in California to pay overtime under the same … Continue Reading

]]>The following is an adaptation by my colleague Tony DeCristoforo of a post by Bryan Hawkins, Kirk Maag and Adam Belzberg that originally appeared on Stoel Rives World of Employment blog.

California Governor Jerry Brown recently signed AB 1066, which will require grape growers and other agricultural employers in California to pay overtime under the same conditions as non-agricultural businesses. The bill is the first of its kind in the nation.

California law defines employees “employed in an agricultural occupation” broadly to include any employment relating to the cultivation or harvesting of agricultural commodities, or the maintenance and improvement of a farm and/or farm equipment. Prior to the signing of AB 1066, such employees were entitled to time-and-a-half pay after working 10 hours in a day or 60 hours in a week. This is substantially different from the overtime laws for California employees in most other industries and occupations, where overtime pay typically kicks in after eight hours in a day or 40 hours in a week.

The practice of exempting certain agricultural employees from overtime laws originated with the federal Fair Labor Standards Act (FLSA), which sets federal requirements related to minimum wage, overtime pay, and child labor. The FLSA was enacted in 1938 and originally exempted certain agricultural employees from both federal minimum wage and overtime pay. Today, these employees remain exempt from the FLSA’s overtime pay requirements.

AB 1066 gradually lowers the number of hours that vineyard workers and other agricultural employees must work to be entitled to time-and-a-half pay. Commencing January 1, 2019, most people employed in an agricultural occupation are entitled to overtime pay after working more than nine and one-half hours in any given workday or more than 55 hours in a workweek. On January 1, 2020, those numbers decrease to nine hours in a workday and 50 hours in a workweek. Starting January 1, 2021, overtime must be paid after eight and one-half hours in a workday and 45 hours in a workweek. And as of January 1, 2022, the law requires time-and-a-half pay after eight hours in a workday and 40 hours in a workweek, which is the same as most other California occupations. The law also provides that beginning January 1, 2022, farmworkers are entitled to twice their regular rate of pay for any work in excess of 12 hours in one day. For smaller employers, those who employ 25 or fewer employees, the initial phasing-in process begins on January 1, 2022; employees who work for these smaller employers are not entitled to AB 1066’s double-time pay requirement until January 1, 2025.

The law also grants the governor the power to temporarily suspend the scheduled phase-in of these new overtime requirements. This authority, however, ends on January 1, 2025.

While the phase-in of AB 1066 will not begin until 2019, grape growers and other employers with agricultural operations in California should start thinking now about how they will revise their employment processes to ensure compliance.

Last week the Environmental Protection Agency (EPA) and the Department of Justice (DOJ) announced that D.G. Yuengling and Son, Inc., a Pennsylvania brewery, settled Clean Water Act (CWA) violations involving wastewater discharge into public treatment facilities for $2.8 million and a commitment to spend over $7 million to reduce environmental impacts of its brewery operations.

Breweries generally need to obtain a permit to discharge industrial waste into municipal treatment facilities. Breweries’ wastewater is considered industrial waste because the water discharged usually contains high concentrations of nutrients which, although they are not toxic, lead to more costly treatment. In many cases, a permit has limits on the discharge and requires pretreatment of waste before it is discharged. Although Yuengling obtained had the permit required by Section 402 (b)(8) of the CWA for both of its Pottsville breweries, they violated the terms and conditions of the pretreatment program. The Greater Pottsville Area Sewer Authority (GPASA) referred the case to EPA, and the United States identified 141 instances between 2008 and 2015 where Yuengling violated pretreatment permit requirements, and discharged biological oxygen demand (BOD), phosphorus, and zinc to the GPASA treatment plant in quantities exceeding their permit limits. The resulting fine was hefty, resulting not only in a cash penalty but Yuengling agreeing to make significant facility upgrades and operational changes. Such measures include having to design and implement an environmental management system for its breweries, conduct environmental audits, or optimize and improve operation and maintenance of the pretreatment system.

Breweries use, on average, 7 gallons of water to produce 1 gallon of beer, which means wastewater discharges can quickly become problematic if not properly monitored pre-discharge. Although it is uncertain whether EPA will start investigating breweries for CWA violations more regularly, this case reinforces the importance of breweries double checking their compliance plans and operational protocols to make sure they are staying in compliance with their discharge limits and that pretreatment systems are adequate to reduce the risk of potential violations.